If you own property that you rent out, the Government launched the Let Property Campaign to give landlords an opportunity to get up to date with their tax affairs and take advantage of the best possible terms.
The reason behind the campaign is that many landlords either haven’t disclosed this income to HMRC or have made errors in the process. Either way, this can lead to penalties that may be up to 100% of the unpaid liabilities or up to 200% for offshore-related income.
Such hefty fines can seriously affect a property owner’s cash flow and wider financial situation, so disclosing rental income to HMRC and settling everything sooner rather than later is definitely the right course of action.
Any landlord with undisclosed income should take advantage of the Let Property Campaign, as this information must be reported to HMRC. Once you’ve provided full details of any income, gains, tax and duties relating to your rental property, you will have 90 days to pay what you owe.
This applies to landlords with one or more rental properties, including holiday lettings, student properties, workforce rentals, and renting out a room in your main home for more than the Rent a Room Scheme threshold (currently £7,500 a year).
The campaign also applies to properties rented out by companies and trusts. However, it doesn’t apply to non-residential properties such as shops, garages and lock-ups.
Waiting for HMRC to find out about any tax you owe will almost certainly result in massive fines, which makes voluntarily taking part in the Let Property Campaign a very savvy move. Fortunately, the process is pretty simple:
You’ll be pleased to hear that HMRC is taking a very fair approach with the Let Property Campaign. The more information you provide and the greater its accuracy, the more likely your penalties will be reduced due to you helping to get everyone on the same page. There’s even a chance that there won’t be a penalty at all, although this isn’t guaranteed.
If you’re not sure how much tax you owe, HMRC has created a tax calculator for the tax years 5th April 2010 to 5th April 2020. However, we recommend getting in touch with the team here at TreyBridge Accountants, as we’ll ensure that you know exactly how much you need to disclose to HMRC down to the penny.
Our tax specialists will also give you all of the information HMRC requires, which could result in your penalty being reduced as explained above.
If you believe you owe any amount of tax on any kind of rental income, you absolutely must let HMRC know right away. For expert support and guidance, call our Yorkshire office on 01482 235575, our London office on 0207 885 0605, or fill in our contact form.
